Online business eSold has bought online grocery deals site Off Your Trolley for an undisclosed amount, adding to the consolidation in the deals area.
Off Your Trolley offers discounts on a wide range of products including food, alcohol, home care and personal care.
The site was owned by mobile accessories distributor CellNet, which is listed on the Australian Securities Exchange.
CellNet bought the business in July last year from entrepreneurs Stacey Carlon and Sarah Costin just five months after the business started.
eSold made this year’s Smart50 list and founder Ben Stefanescu told SmartCompany while many in the sector are struggling, eSOLD is “growing like crazy”, turning over $14 million last year and with expectations of $25 million to $30 million in turnover next year.
“We’re fairly excited about it as we are going to be incorporating wine as well into Off Your Trolley. We are basically looking to cover more consumer product and we think customers are excited about having the convenience of ordering their groceries online,” says Stefanescu.
He says Off Your Trolley will complement the eSold business – which sells retail products including whitegoods, electronics, televisions, computers and toys – and will add to eSold’s database.
Consumers searching for Off Your Trolley will be automatically redirected to the eSold site.
“It’s exciting to take on another database of customers. It’s about 100,000 customers, which puts us at about 600,000 customers and we are hoping to be no more than one year away from hitting one million customers.”
Stefanescu says the deal took two or three months to pull together and was for a “reasonable amount of money” which he would not disclose.
He says this is not the last to be heard from eSold on the acquisitions front, with negotiations underway to acquire another site.
Stefanescu has not been put off by the pressure some segments of the group buying sector are under and says eSold is looking to “revolutionise online marketing” and change the sector’s reputation.
While revenue is down for the group buying sector, Stefanescu points to internet sales figures and a report from Frost & Sullivan which predicts online shopping in Australia will hit $16 billion this year and should reach $26.9 billion by 2016.
“What is interesting is that all the TV networks in Australia have actually bought into a group buying site and that’s quite interesting,” he says.
“We think the group buying business model is essentially flawed because they force the business to discount their business dramatically and then they take up to half of that.
“I’ve talked to so many businesses who have said they would never do a deal with a deal site and these sites are actually burning everything behind them; they are like a Ponzi scheme as they destroy businesses along the way.”
Stefanescu says eSold is “completely different” as its model works on customers being charged $1 to download a coupon which participating business then refund.
Stefanescu and his business partners also own DiscountOn, a coupon-based site that offers more than 500 deals every day.